Money

The No. 1 sign you've saved up enough to buy a house

Three-decker houses in Dorchester, MA.
Steve Dunwell | Getty Images
Three-decker houses in Dorchester, MA.

Once you make the decision to buy a house, it's time to start saving. And then to save some more.

Between putting money down, keeping up with mortgage payments and repairs, and maintaining your emergency fund, you can never have too much stashed away.

But how much do you need, really, before you're ready to make a purchase?

Eric Roberge, CFP and founder of Beyond Your Hammock, tells CNBC that the biggest sign you've saved up enough is if you could comfortably afford to move in today.

"The No. 1 sign that you have enough saved for buying a home is that you can easily put 20 percent down, have 10 percent for closing costs and other move-in expenses and feel comfortable affording the expected monthly mortgage payment," he says.

You don't necessarily need to put a full 20 percent down, but having enough to do so regardless provides a nice financial cushion for the expected, yet irregular, costs that are bound to arise, including insurance, new furniture and any updates or repairs.

"Both you and the mortgage provider will feel much more comfortable if you are entering the buying process in this position of strength," Roberge says.

Once you think you've got a fair amount saved up, ask yourself: If you put 20 percent down, plus another ten percent for cover closing costs and moving expenses, would you still be able to pay your mortgage and live comfortably? If the answer is no, you might want to keep saving.

"The No. 1 sign that you don't have enough money to buy a home is if you find yourself saying, 'I think we might be able to make it work,'" Roberge says.

You don't want to put yourself in a position where you're barely scraping by.

"I'm all about taking calculated risks when appropriate, but taking a risk on the largest purchase you've ever made is not smart," Roberge explains. "Emotions run high (both excitement and stress) when searching for a home, but moving too quickly is a recipe for disaster."

In short, don't rush things. "Take your time, be smart and know that the world isn't going to end if you have to rent for one more year."

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